France’s Socialist hopeful promises to storm the financial Bastille

François Hollande, the leftwing candidate in April’s presidential elections, has built up a commanding lead in the polls by attacking big finance

On a bitterly cold morning in Dijon railway station last week, a diminutive Frenchman exited his train to the kind of fuss and fanfare that has escaped him for most of a 30-year political career. Sweeping down the frosty platform with the unmistakable air of a man in possession of his mojo, François Hollande was greeted by a flurry of victory signs from grinning passengers waiting for the 9.34am to Lausanne to leave. Surrounding him was an impressively large media scrum.

“The man of the moment!” said one bystander, as the Socialist candidate for the French presidency paused for another impromptu interview.

Welcome to the new world of the man once derided by opponents as Monsieur Flamby (“Mr Pudding”) – a reference both to Hollande’s weight and a perceived flabbiness in his political opinions. That nickname seems out of date now, after a campaign-defining speech last month in the tough Paris suburb of Le Bourget. Giving an impassioned and polished attack on the speculation and profiteering that led to the economic crisis that has engulfed Europe, Hollande told the 20,000-strong crowd: “My enemy is the world of finance.” Belatedly, French company directors, investment bankers and market movers are waking up to the growing popularity of a presidential candidate who promises to raise taxes on rich individuals and big business in order to boost growth.

With the first round of the French elections barely two months away, the polls suggest that Hollande is choosing the right adversaries. On the day he visited Dijon one survey suggested he would win a straight contest with President Nicolas Sarkozy, gaining as much as 60% of the vote.

For a politician habitually described as slightly bland, the transformation into a fêted “tribune of the people” must come as something of a shock. Up until this election campaign Hollande, 57, was known for his love of a joke, his portly mastery of the backroom politics of the Socialist party (PS), and his failed marriage to the former siren of French socialism, Ségolène Royale, who lost the presidential election of 2007.

But as he has surged ahead of Sarkozy in the polls, Hollande has slimmed down, sharpened his suits and replaced humour with radical indignation. A commentator in the conservative Le Figaro wryly compared his egalitarian zeal to that of Saint-Just, Robespierre’s uncompromising right-hand man in the French revolution.

Hollande is no revolutionary. But according to Geoffroy Clavel, political editor at the French Huffington Post, he is hitting the right notes as the French economy languishes, austerity bites and youth unemployment reaches 25%. “The Le Bourget speech was a huge success,” said Clavel. “The economic crisis has changed politics and people were ready to hear a message of social justice and equity. They’re ready to hear that everyone, including those at the top, is going to pay what they should pay.”

France is having a far feistier version of the Stephen Hester and Fred Goodwin debate that has dominated headlines in Britain. A few days after Le Bourget, Hollande unveiled a 60-point programme for government. In recognition of the parlous state of French finances, there is a commitment to reduce the budget deficit to 3% (from well above 5%) by 2013. The list of austerity measures includes a freeze on public sector recruitment. But the route to sound accounts is principally by way of tax rises rather than cuts, and most of them are directed at the upper tiers of French society.

Pledges include raising the top rate of income tax to 45%, capping tax breaks for wealthy individuals at €10,000 (£8,375) and significantly hiking capital gains tax. The biggest companies in France will also be taxed at a higher rate, while smaller companies will pay less.

“Those who have benefited from crazy pay levels will have to make an effort,” said Hollande at the document’s launch. The revenue generated, says the PS, will be used to promote growth as well as cut the deficit. Hollande promises state-funded apprenticeships for the young, thousands of new teachers, a new public investment bank and new research and innovation programmes. Without growth, his aides insist, deficits will never be brought under control, as governments across Europe are discovering to their dismay.

Is social democracy in one country possible? Since the global banking crisis struck in 2008, centre-left governments in Britain, Spain and Greece have paid the price. The large majority of the 27 governments of the EU are now of the right and all have focused their energies on cutting spending and shrinking the state. Austerity has become the watchword of a continent. But not for the first time, the French may be about to go against the grain.

The language inside the modest Hollande campaign headquarters, five minutes’ walk from the Eiffel Tower, has not been heard in a British election campaign for 30 years or more. Benoît Hamon, the PS spokesman, believes that Europe’s social democratic parties “gave up too early” on the idea that governments should play a central role in regulating markets, finding people jobs and driving economic growth. “For years there has been this anomaly that in the globalised market it is the markets that govern in place of elected governments. Basta! Enough!

“We’re being up front, saying: ‘If you’re a rich individual or a rich company, yes, you’re going to pay more.’ We’re saying the same to the banks and we’re telling them they won’t pass the charges on to their clients.”

Karine Berger, one of Hollande’s most senior economic advisers and a parliamentary candidate for a rural seat in the Alps, rejects the idea that the wealth of the very top earners in France corresponds to benefits they bring to the wider society. “We believe that there are some people who play a more important role than others,” she says, “But they are not the people earning stratospheric wages. They are the engineers, the scientists, the people building companies, not necessarily the top executives or the big traders.”

What if the executives and traders threaten to up sticks and go elsewhere? Her reply is unequivocal.

“Look, we want to say to France: ‘We want everyone on board, especially those people inventing the future.’ And our government will be committed to sound finance and getting public debt under control. We are very serious about that. But for those people holding society to ransom, let them leave.” She doesn’t think they will.

The challenge to high finance has already been dismissed by some on the right. On the day of Hollande’s visit to Dijon, Dominique de Villepin, the former prime minister who is running as a rightwing rival to Sarkozy, was campaigning in the same city. “The Socialist programme is not sustainable,” he told reporters. “I would expect that within months it will be corrected by the very same markets that he has denounced.”

He invoked the spectre of the early 1980s when François Mitterrand’s first presidency brought Communists into the government, launched a wave of nationalisations, increased public spending and raised the minimum wage. The markets quickly took their revenge as the franc was devalued three times. In 1983 the Mitterrand government performed a humiliating “austerity turn”.

Berger admits that some of the big beasts of French business are beginning to warn that they could “make life difficult” for a Hollande presidency. But, she says, “it will not be 1981 again. The first legislation we will pass in the summer, if elected, will be our commitment to get the budget deficit down to 3% by 2013 and a five-year plan to get the finances in order”.

Last month Berger moved to reassure bankers and businessmen that Hollande’s plans to balance austerity with growth measures were financially responsible. Given the alternative of eurozone recession and spiralling unemployment, she believes French companies will recognise that austerity without measures to boost growth and employment is a dead end. “The point is that a more moral capitalism is also a more efficient one,” she says.

Manuel Valls, who was defeated by Hollande in the race for the Socialist candidacy but is now his spokesman, also dismisses the “back-to-the-eighties” critique. “If the elites continue to gain during this crisis and everyone else loses, that’s devastating for society. If we can’t find different economic answers to the ones that have dominated for 30 years, then there’s no difference between left and right. What is the left for?”

For Sarkozy, the sudden clarity of what Berger calls “a traditional election battle between left and right” is deeply troubling. When the affable Hollande won the race to become the Socialist candidate back in October, the French president was reportedly delighted, believing the fiery leftwinger Martine Aubry would have made a more formidable opponent. In what some of his backers now see as a mistake, the president has delayed formally announcing his candidacy for re-election, emphasising his preoccupation with solving the eurozone debt crisis alongside the German chancellor, Angela Merkel. Now his supporters in the Union pour un Mouvement Populaire (UMP) are urging him to get out and campaign before it is too late. Pledges late last week to crack down on immigration and welfare indicate his likely direction of travel, as he seeks to prevent a haemorrhaging of votes to the far-right Front National. But his approval rating, currently running at 32%, is not encouraging.

As France comes to terms with prolonged austerity, the “bling years” still haunt Sarkozy, undermining his role as a safe pair of hands in the biggest economic crisis the EU has known. Not many voters have forgotten the brash celebrations at Fouquet’s on the Champs-Elysées, the night he was elected president in 2007. Or the subsequent holiday on board the yacht of a businessman friend, after he had hinted at a desire to go on a monastery retreat. The high-profile romance with Carla Bruni soon lost its allure with the French public. And the bizarre incident last month when his son, Pierre, was flown home at taxpayers’ expense from Ukraine after suffering a stomach upset generated another flurry of bad publicity. In the early years it might not have mattered so much. But times have changed.

“Sarkozy was elected president before the scale of the coming crisis was known,” says Clavel. “Now that crisis has changed everything and he is stuck as the candidate of the rich. The problem Sarkozy has is that he himself, his persona, is the problem with so many voters. It’s a personality issue.”

The temporary solution appears to be the recruitment of Merkel on to the Sarkozy campaign team. In an extraordinary joint interview last week, broadcast on French and German state television, the chancellor explicitly backed her French ally for a second term in the Elysée, riding roughshod over usual diplomatic protocol.

“If Mrs Merkel wants to campaign for Mr Sarkozy, she is perfectly within her rights,” said Hollande. “It’s a tough task she has set herself, because it’s not easy to convince the French”.

The motives for Merkel’s intervention go far beyond the expression of solidarity with a fellow conservative leader. Hollande has already signalled his intention to renegotiate the stability pact agreed by 25 European countries last December, in order to insert a new commitment to economic growth.

For well over a year, the German chancellor has led the drive towards ever greater austerity across the eurozone, to howls of pain from Greece, Spain and beyond. The stability pact is intended to introduce disciplinary measures and sanctions imposed on laggards by Brussels, to ensure that feet continue to be held to the fire. But as the German daily Süddeutsche Zeitung put it last week after the “Merkozy” television appearance: “The greatest living danger to Merkel’s fiscal pact is called Hollande.”

At Le Reflet, a cafe-bar at the heart of Paris’s Left Bank and a stone’s throw from the Sorbonne, successive generations of students have witnessed recurrent new dawns of the French left, many of them false. Hollande may be riding high in the polls, but the young drinkers were wary. “I’ll vote for him, but I can’t say I’m full of enthusiasm,” said Julia, a 28-year-old student. “Things are just really difficult. Qualifications aren’t enough to get jobs or even internships.” According to one poll, solving the unemployment crisis is the priority of 71% of French voters.

When Mitterrand became France’s first elected Socialist president in 1981, some of his more sentimental supporters spoke of les lendemains qui chantent (“the tomorrows that sing”). This is not that kind of election. If François Hollande follows in his footsteps, the expectations will not be so lyrically expressed. But they will be just as difficult to fulfil.